The U.S. Court of Appeals for the D.C. Circuit rejects challenges from both sides of the issue, finding that EPA limits on emissions from coal-fired power plants are valid.

WASHINGTON — A federal appeals court Tuesday upheld the Environmental Protection Agency's first-ever limits on air toxics, including emissions of mercury, arsenic and acid gases, preserving a far-reaching rule the White House had touted as central to President Obama's environmental agenda.

In a 2-1 decision, the U.S. Court of Appeals for the D.C. Circuit found that the rule regulating power plants "was substantively and procedurally valid," turning aside challenges brought by Republican-led states that had argued it was onerous and environmental groups that had contended it did not go far enough.

The EPA called the decision "a victory for public health and the environment." Liz Purchia, a spokeswoman, said, "These practical and cost-effective standards will save thousands of lives each year, prevent heart and asthma attacks, while slashing emissions of the neurotoxin mercury, which can impair children's ability to learn."

Environmentalists also hailed the ruling, which John Walke of the Natural Resources Defense Council called a "sweeping victory." Walke said the rule was arguably the most "important regulation driving the cleanup of old, dirty coal plants."

Joy Yearout, spokeswoman for Atty. Gen. Bill Schuette of Michigan, the lead plaintiff in the states' lawsuit against the rule, said the EPA "illegally and unreasonably failed to consider the real costs associated with this policy."

Yearout said Michigan would weigh its options as other states do likewise. The plaintiffs could petition the entire appeals court to hear the case or appeal to the Supreme Court, but the odds are against such an appeal.

The combustion of coal for power generation releases pollutants such as mercury into the air. Through precipitation, mercury returns to the earth and changes into a highly toxic substance called methylmercury. Methylmercury contaminates fish that people consume. The chemical is particularly dangerous for pregnant women, who can easily pass it to their fetuses.

The EPA estimates that the mercury and air toxics rule will prevent 11,000 premature deaths, 4,700 heart attacks and 130,000 asthma attacks annually. Industry has argued that the health benefits of the federal standard are overstated.

Under the air toxics rule, power plants can emit 1.2 pounds of mercury per trillion BTUs of energy produced. Industry had sought a limit of 1.4 pounds. But the EPA arrived at its figure based on a formula set out under the Clean Air Act.

Industry and allied state governments had argued that in crafting the mercury rule, the EPA wrongly interpreted the Clean Air Act "to preclude consideration of costs." The appeals court sided with the EPA's contention that Congress had stipulated that the agency was not required to do so when "mitigating hazards to public health and the environment."

Industry has fought the possibility of an air toxics rule for decades because it would necessitate the installation of expensive technology on coal plants to strip the pollutants from emissions. The Obama administration finalized the rule in late 2011. The rule has been in effect since it was published in early 2012, but companies have until 2015 to comply and many have received one-year extensions on that deadline.

Despite the litigation, nearly 70% of coal-fired power plants are already in compliance, according to the Energy Information Administration, the analysis arm of the Energy Department.

About a dozen states have already approved rules to cut mercury and other toxic substances, including California. The state's 27-year-old Air Toxics Hot Spots Program requires industrial facilities to report their air toxics emissions, including mercury, annually to local air districts, said Stanley Young, spokesman for the California Air Resources Board.

The air districts then verify the data and determine whether the emission levels pose a health threat to nearby communities. If the emissions exceed safe limits, the facilities have to cut pollution to acceptable levels, Young said.

Because the EPA and California programs differ, it is hard to gauge which is more stringent, Young said.

Still, he added, "It is quite possible for a facility to comply with U.S. EPA's standards but still be considered a high risk because California's toxics program not only takes into account mass emissions, but also population distance, weather conditions and geography."